Board Risk Oversight Questionnaire

This Boardroom Tool provides a set of questions to drive a board and management dialogue and obtain a robust understanding of the effectiveness of risk management activities throughout the organization. The questions explore issues and practices around the following topics:

• The roles of the board, committees, and management: Questions include, are risk oversight activities clearly differentiated between the board and its committees, and among the various committees? 
• The company's risk profile: Questions include, have we sufficiently considered risks that we could be indirectly exposed to?
• Defining the company's risk appetite: Questions include, do the board and committees discuss risk appetite with management? 
• Integrating strategy, risk, and performance: Questions include, how do we as a board evaluate whether our strategy itself is too risky or risk averse?
• Risk reporting: Questions include, has management developed key risk indicators that offer early warnings into increased exposure?
• Risk mitigation: Questions include, does management regularly communicate about the success or failure of risk mitigation?
• Risk culture: Questions include, do the compensation structure and performance goals we have set for the executive team prevent excessive risk-taking behaviors at multiple levels of the organization?

These questions align with the common risk oversight practices identified in the NACD report, Director Essentials: Strengthening Risk Oversight.